Devolved taxes to have framework for policy changes

A new approach to the planning, management and implementation of the fully devolved taxes in Scotland has been put to consultation by the Scottish Government.

The Programme for Government 2018-19 made a commitment to establishing a more strategic and structured process to engagement, legislation and delivery around the fully devolved taxes. At present these are land and buildings transaction tax, and Scottish landfill tax. The proposed Devolved Taxes Policy Framework would set up the process by which changes to the fully devolved taxes will be proposed, consulted on and assessed.

The paper explains that changes to the fully devolved taxes can be driven by a number of factors, such as new policy development, necessary technical changes, decisions made by Revenue Scotland or a tribunal, representations from stakeholders, and in response to measures announced by the UK Government, sometimes at short notice.

Other than the Scottish Budget, however, there is no formal process or structure in place to guide the consideration, analysis and implementation of legislative change for the devolved taxes. The Scottish Government has received representations from stakeholders on the current process and considers this to be an appropriate time to establish a framework to bring greater certainty, transparency and efficiency to the tax policy making process.

Its Devolved Taxes Policy Framework would set out a policy and legislative cycle for changes to devolved taxes legislation. Ministers aim to ensure that:

• strategy and priorities in relation to tax are clear;
• there is early and continuous consultation throughout the policy cycle;
• stakeholders are encouraged to participate in the formulation of tax policy and given clarity around when and how they can make representations;
• tax changes are announced sufficiently in advance of when they will take effect, providing taxpayers and practitioners with certainty; and
• legislation is reviewed post-implementation.

Whilst the consultation sets out proposals and options for a new process, the Government remains open to alternative views and is keen to learn from the experience and expertise of individuals and organisations.

Click here to access the consultation. Responses are due by 6 June 2019.